Monday 11 October 2021 1:54 pm

Banco Hipotecario forms alliances to help El Salvador's Bitcoin roll-out

Banco Hipotecario has teamed up with TESOBE, API3, Qredo and Sovryn to enhance financial inclusion throughout El Salvador.

El Salvador’s ground-breaking Bitcoin Law came into force on September 7, 2021, introducing unfamiliar challenges for traditional financial institutions as well as more specific consumer needs related to Bitcoin storage and currency exchange.

The alliance with Hipotecario and TESOBE – the company behind the Open Bank Project – API3 – and partners is designed to ensure digital banking and the national infrastructure can handle momentous change. 

The Open Bank ProjectAPI3 partnership has already been in place for a decade, and has set major ambitions to merge traditional and decentralised industries.

The alliance has selected Qredo’s decentralised custodial infrastructure to power Bitcoin banking solutions in El Salvador. Alongside this, Sovryn, the Bitcoin-native decentralised trading and lending platform will provide the infrastructure to enable traditional banks to offer Bitcoin-native DeFi products such as lending, trading and Bitcoin backed-stablecoins to their customers. 

The collective aim is to accelerate the democratisation of Bitcoin electronic payments and help citizens enjoy the benefits of digital and decentralized transactions. It will also support the nation’s larger financial framework to promote a smooth and effective integration of Bitcoin as legal tender, driving financial inclusion for Salvadorans.

The Bitcoin phenomenon has been sweeping across Latin America since El Salvador’s move to make Bitcoin legal tender. By leveraging Qredo’s revolutionary crypto infrastructure, which is entirely compatible with the Bitcoin Lightning Network used in El Salvador, combined with Sovryn’s ability to build on Bitcoin, TESOBE’s APIs and API3’s Airnode, this alliance will support El Salvador’s seamless transition into a crypto-friendly financial services system.

A great opportunity

“This alliance is a great opportunity for El Salvador to create new financial products that support the needs of our Salvadoran citizens,” said Celina Padilla, president of Bank Hipotecario de El Salvador.

“We are closer than ever to achieving true financial inclusion and I am proud that Banco Hipotecario is the first bank at the national level to carry out this type of alliance. Now everyone has their eyes on our country and on our bank.” 

“We are super excited and grateful for the opportunity to assemble this advanced Crypto Banking infrastructure, which will act as the foundation for a new breed of financial services in El Salvador,” said Simon Redfern, CEO of TESOBE and founder of the Open Bank Project.

“Our combined technologies will help Banco Hipotecario deliver more transparent and inclusive financial services to Salvadorans – especially the underbanked part of the population – and will remove many of the uncertainties that stand between El Salvador and the advantages of cryptocurrency adoption.”

Heikki Vänttinen, co-founder at API3, said: “API3 is incredibly excited to announce this alliance and we can’t wait to see the synergies between these leading technologies in action. As the world’s financial system is modernised, we will help build a foundation for the future of digital banking that can easily be adapted to fit the needs of those who will benefit from it most.”

Meanwhile, Qredo CEO Anthony Foy was equally as enthusiastic.

“We are glad to get in at the ground zero of global Bitcoinisation,” he said.

“Qredo brings the scalability and instant settlement to underpin Bitcoin banking infrastructure, making it possible to adopt crypto assets securely on a national scale, with none of the governance limitations imposed by private keys.” 

Edan Yago, core contributor at Sovryn, commented: “With its adoption of Bitcoin, El Salvador has chosen to rewrite the script of its national finance system and to blaze a trail for other nations to follow. DeFi is now coming to the world and Sovryn is playing a crucial part in these early practical steps towards making Bitcoin adoption a reality in El Salvador and beyond.”